Is A Consumer Proposal The Same As Bankruptcy?
There are numerous pathways out of debt and the trick is finding the one that matches your needs.
In this article, we’ll discuss everything that you need to know about a consumer proposal and bankruptcy.
Are you struggling with insurmountable levels of debt?
If so, then you might be wondering what your options are and the truth is that there are more choices available to you than you might think.
Most people think that the only way out of debt is to file for bankruptcy.
The reality is that the majority of the time, bankruptcy won’t even be the best option available to you.
One of the best alternatives is a consumer proposal.
Many people assume and even inform people that a consumer proposal and bankruptcy are more or less the same thing and that’s just not the case.
There are numerous differences between these two options and you need to understand these to determine which choice is going to be right for you.
What Are The Big Differences Between Consumer Proposal And Bankruptcy?
As mentioned many people assume that these two ways of dealing with debt are essentially the same but this isn’t true.
When you explore these options, you will see that a consumer proposal actually provides distinct benefits.
Through a debt settlement that clears off all the debt, all the creditors must agree to the terms.
For a consumer proposal, you only need creditors to agree up to 50% of the dollar value of the total amount that you owe.
Consumer proposals are also often accepted for less than the value that you actually owe.
Furthermore, with a consumer proposal, you can stop debt collection actions as soon as you file, including wage garnishments.
This is one of the main ways that creditors do seek to gain back the money that they are owed.
Are There Similarities?
There are definitely shared aspects of both a consumer proposal and bankruptcy.
For instance, both are going to negatively impact your credit rating.
However, the impact for a consumer proposal will be less than you might expect.
You will also need to wait at least two years even if you opt for a consumer proposal before you can access a mortgage.
Indeed, many lenders will see a consumer proposal and bankruptcy as essentially the same thing.
That said, it is possible that a consumer proposal could save you more money in the long term.
Indeed, with the right proposal that matches your needs, you could save thousands in terms of what you need to pay back.
Will Consumer Proposal Be The Right Choice For Everyone?
You might think that a consumer proposal is always going to be the right choice.
However, this won’t be the case and it will always depend on your individual financial situation.
You need to make sure that you can afford the terms of the proposal before it’s presented to creditors.
Do you need more assistance determining which debt relief plan is going to be right for you?
Call today and a friendly member of our team will be happy to support you here.